In this study we hope to be able to clarify the short-term risks and benefits of hormone replacement therapy (HRT) in post-menopausal women with non-insulin-dependent diabetes mellitus (NIDDM). Cardiovascular disease is the leading cause of death in women with NIDDM, and HRT appears to decrease the risk of cardiovascular disease by about 40% in normal (non-diabetic) women, yet no one has closely studied whether HRT would be beneficial for women with diabetes. Some worries are that HRT would worsen hypertriglyceridemia or adversely affect glucose levels in diabetic women. However, recent trials from Europe using estrogen alone showed better glucose levels and better cholesterol profiles in those diabetic women using estrogen. Our study will use a combination HRT regimen using Premarin and micronized progesterone. Our study is double-blind, randomized, placebo-controlled parallel arm clinical trial comparing three months of estrogen + progesterone with placebo. After a screening visit, eligible subjects will be counselled on a weight maintaining diet and will return every two weeks for 6-8 weeks in order to have their glucose levels improved as much as possible by adjusting their medications. Then they will be admitted to the ICCR for two days of baseline measurements. The subjects will then be randomly assigned to HRT or placebo, stratified according to diabetes treatment so that we will have equal numbers of insulin-treated subjects in each group. They will be seen monthly during the treatment period for fasting blood tests. At the end of the treatment period subjects will be admitted to the ICCR for another two days and have the identical measurements done as they had at the beginning. The statistical comparison to be made is between the baseline and treatment values for each subject.